Recently, the International Monetary Fund, lauded India for maintaining fiscal discipline even in an election year. According to the IMF, Indian economy is doing well and it continues to remains world’s bright spot.
In an interview with PTI, Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, said, “Macro fundamentals look pretty good.” He further went on to say that the Indian economy is doing well. Growth at 6.8 percent is very good rate. Regarding inflation, while stressing on why inflation targeting is imperative and that it remains there on durable basis. He praised that India’s inflation rate is declining and that it is now below 5 percent.
He further went on to say, “One thing I would say is that maintaining fiscal discipline, especially in the election year, for me, has been quite a highlight because countries do embark on fiscal adventures in the election year.”
Mr Srinivasan said, “This government has maintained a discipline. I think, is very important because at the end of the day, sound macro fundamentals are the basis on which countries prosper and have durable growth. So that’s very important to maintain that.”
He stated that over the past few years, India had effectively navigated various shocks. He said that it is becoming one of the world’s fastest-growing major economies in the world. Applauding India he further stated, “In fact, for this year, for 2024-25, we project growth at 6.8 percent led by private consumption and public investment.”
Commenting on the economy he said, “If you look at the macro fundamentals, they’re pretty solid. Despite this being an election year, the government has adhered to fiscal discipline. You look at the reserve position, it’s strong. If you look at overall macro fundamentals, it’s pretty good.” He added that the risks to the economy are broadly balanced.
According to RBI, for the week ending April 5, India’s foreign exchange reserves increased by $2.98 billion to a record high of $648.562 billion. Moreover, UNCTAD in its report states that India will grow at 6.5% in 2024. The IMF had earlier revised its forecast to 6.8% attributing to robust domestic demand. The World bank has revised it to 6.6%. Fitch from 6.5% to 7% and the ADB from 6.7% to 7%. Overall, ahead of the elections India seems to be moving at an unprecedented pace and scale towards becoming the 3rd largest economy of the world in coming five years.
IT IS MOVING Towards “Viksit Bharat, Sashakt Bharat!”